AN EVALUATION OF ORGANISATIONAL CHANGE AND ITS IMPACT ON STAFF PRODUCTIVITY A CASE STUDY OF FRIST BANK PLC

CHAPTER 1

1.1 BACKGROUND OF THE STUDY

Bateman and Zeithaml (1990), who identified four major areas of organizational change: strategy, technology, structure and people. All the four areas are related and companies often must institute changes in the other areas, when they attempt to change one area. The first area, strategy changes can take place on a large scale-large for example, when a company shifts its resources to enter a new line of business or on a small scale for example, when a company makes productivity improvements in order to reduce costs.

There are three basic stages for a company making a strategic change: realizing that the current strategy is no longer suitable for the company’s situation, establishing a vision for the company’s future direction and implementing the change and setting up new systems to support it.

Technological changes are often introduced as components of larger strategic changes, although they sometimes take place on their own. An important aspect of changing technology is determining who in the organization will be threatened by the change. To be successful, a technology change must be incorporated into the company’s overall systems and a management structure must be created to support it. Structural changes can also occur due to strategic changes as in the case where a company decides to acquire another business and must integrate it as well as due to operational changes or changes in managerial style. For example, a company that wished to implement more participative decision making might need to change its hierarchical structure.

People changes can become necessary due to other changes, or sometimes companies simply seek to change workers’ attitudes and behaviours in order to increase their effectiveness. Attempting a strategic change, introducing a new technology and other changes in the work environment may affect people’s attitudes (sometimes in a negative way) (Bateman and Zeithaml, 1990). But management frequently initiates programs with a conscious goal of directly and positively changing the people themselves. In any case, people changes can be the most difficult and important part of the overall change process. The science of organization development was created to deal with changing people on the job through techniques such as education and training, team building and career planning .Resistance to change: Resistance to change based on the existing theoretical and empirical study, the negative evaluation of and resistance to change may occur on account of a number of factors.Bateman and Zeithaml (1990) outlined a number of common reasons that people tend to resist change. These include: inertia, or the tendency of people to become comfortable with the status quo, timing, as when change efforts are introduced at a time when workers are busy or have a bad relationship with management, surprise, because people’s reflex is to resist when they must deal with a sudden, radical change or peer pressure, which may cause a group to resist due to anti-management feelings even if individual members do not oppose the change. Resistance can also grow out of people’s perceptions of how the change will affect them personally. They may resist because they fear that they will lose their jobs or their status, because they do not understand the purpose of the change, or simply because they have a different perspective on the change than management.Making a solid case for the change is critical for the change to have a lasting effect. The source of information about the change must be credible. Stroh’s (2001-2002) study indicates that the participation of employee leads to more positive relationships with the organization and thus greater willingness to change

Therefore the research intends to prefer an evaluation of organizational change and its impact on staff productivity

1.2 STATEMENT OF THE PROBLEM

The business environment produces change in the workplace more suddenly and frequently than ever before. Mergers, acquisitions, new technology, restructuring downsizing and economic meltdown are all factors that contribute to a growing climate ; of uncertainty. organisational ability to adapt to changing work conditions is key for individual and organizational survival. Change will be ever present and learning to manage and lead change includes not only understanding human factors, but also skill to manage and lead change effectively (Pettigrew and Whipp, 1991).

However for change to produce its desired effect it must be accepted and embraced by the organizational employees; But this is not often the case. Most changes results in employee resistance of change in the organization ;Thereby resulting in poor morale and productivity

Therefore the problem confronting this research is to profer an evaluation of organizational change and its impact on staff productivity with a case appraisal of First Bank plc

1.3 RESEARCH QUESTION

1 What is the nature of organizational change

2 What is the process and methods of organizational change

3 What constitute staff productivity

4 What is the impact of change on staff productivity

5 What is the impact of change on staff productivity in First Bank plc

1.4 OBJECTIVE OF THE STUDY

1 To determine the nature of organizational change

2 To determine the nature of staff productivity

3 To determine the impact of change on organizational productivity

4 To determine the impact of change on staff productivity in First Bank plc

1.5 SIGNIFICANCE OF THE STUDY

The study shall focus on the essential factors necessary to effect change in the organization

It shall determine the impact of change on organizational productivity

The study shall provide significant information on managing change to managers and organizations

1.6 STATEMENT OF THE HYPOTHESIS

1 Ho Staff productivity in First Bank plc is low

Hi Staff productivity in First Bank plc is high

2 Ho change is not accepted in First Bank plc

Hi change is accepted in First Bank plc

3 Ho The impact of change on staff productivity in First Bank plc is negative

Hi The impact of change on staff productivity in First Bank plc is positive

1.7 SCOPE OF THE STUDY

The study shall profer an evaluation of organizational change and its impact on staff Productivity.

1.8 DEFINITION OF TERMS

ORGANISATIONAL CHANGE DEFINED;Organizational change occurs when a company makes a transition from its current state to some desired future state.

MANAGING CHANGE

Managing organizational change is the process of planning and implementing change in organizations in such a way as to minimize employee resistance and cost to the organization, while also maximizing the effectiveness of the change effort. Change is both inevitable and desirable for any progressive organization (Fajana, 2002).

Lewin’s model: Considers that change involves a move from one static state via a state of activity to another static status quo. Lewin specifically considers a three stage process of managing change: unfreezing, changing and re-freezing. The first stage involves creating a level of dissatisfaction with the status quo, which creates conditions for change to be implemented. The second stage requires organizing and mobilizing the resources required to bring about the change. The third stage involves embedding the new ways of working into organization.

Beer and colleagues: Advocate a model that recognizes that change is more complex and therefore, requires a more complex, albeit still uniform set of responses to ensure its effectiveness. They prescribe a six-step process to achieve effective change. They concentrate on task alignment, whereby employees roles, responsibilities and relationships are seen as key to bring about situations that enforce changed ways of thinking, attitudes and behaving. The stages are Armstrong (2004):

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Mobilize commitment to change through joint diagnosis

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Develop a shared vision of how to organize

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Foster consensus, competence and commitment to shared vision

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Spread the word about the change

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Institutionalize the change through formal policies

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Monitor and adjust as needed

Shaw’s model: looks at change in a different form. Change is seen as both complex and also evolutionary. The starting point for their (and a number of other more recent models) model is that the environment of an organizations is not in equilibrium. As such the change mechanisms within organizations tend to be messy and to a certain extent operate in reverse to the way outlined by Lewin. It is not appropriate to consider the status quo as an appropriate starting point, given that organizations are not static entities. Rather the forces for change are already inherent in the system and emerge as the system adapts to its environment.

PRODUCTIVITY DEFINED

Productivity is an overall measure of the ability to produce a good or service. More specifically, productivity is the measure of how specified resources are managed to accomplish timely objectives as stated in terms of quantity and quality. Productivity may also be defined as an index that measures output (goods and services) relative to the input (labor, materials, energy, etc., used to produce the output). As such, it can be expressed as:

Hence, there are two major ways to increase productivity: increase the numerator (output) or decrease the denominator (input). Of course, a similar effect would be seen if both input and output increased, but output increased faster than input; or if input and output decreased, but input decreased faster than output.

Organizations have many options for use of this formula, labor productivity, machine productivity, capital productivity, energy productivity, and so on.